As expected, the New York State Department of Labor has announced increases to the minimum salary thresholds for employees who are exempt from the New York minimum wage and overtime requirements under the administrative and executive exemptions. These increases are being proposed in accordance with Section 652(2) of the New York Labor Law, which requires the Commissioner of Labor to increase the minimum salary thresholds in the same proportion as increases to the State minimum wage.

Beginning on December 31, 2016, employers would be required to pay the following minimum salaries to their New York employees who are classified as exempt under the administrative or executive exemptions in order to retain their exempt status:

Large Employers (11 or more employees) in New York City

•           $825.00 per week on and after 12/31/16

•           $975.00 per week on and after 12/31/17

•           $1,125.00 per week on and after 12/31/18

Small Employers (10 or fewer employees) in New York City

•           $787.50 per week on and after 12/31/16

•           $900.00 per week on and after 12/31/17

•           $1,012.50 per week on and after 12/31/18

•           $1,125.00 per week on and after 12/31/19

Employers in Nassau, Suffolk, and Westchester Counties

•           $750.00 per week on and after 12/31/16

•           $825.00 per week on and after 12/31/17

•           $900.00 per week on and after 12/31/18

•           $975.00 per week on and after 12/31/19

•           $1,050.00 per week on and after 12/31/20

•           $1,125.00 per week on and after 12/31/21

Employers Outside of New York City, Nassau, Suffolk, and Westchester Counties

•           $727.50 per week on and after 12/31/16

•           $780.00 per week on and after 12/31/17

•           $832.00 per week on and after 12/31/18

•           $885.00 per week on and after 12/31/19

•           $937.50 per week on and after 12/31/20

This is the first time that the minimum salary levels would vary based upon the geographic region.  For employees who may work in regions with different minimum salary levels, the proposal does not clarify which minimum salary level would apply to such employees.  For example, what salary level would apply to an employee who regularly works in New York City and Nassau County?  Future regulations from the New York Department of Labor may expound on this issue. 

Under the new rules, the impact of the minimum salary increases would vary, depending on the type of employer at issue.  “Large” New York City employers that will be subject to the new $913 minimum salary level under changes to the federal overtime rule (effective December 1, 2016) will be subject to an even higher minimum salary requirement as of December 31, 2017.  At that time, “large” New York City employers will be required to pay employees who are exempt under the administrative or executive exemptions at least $975 per week to maintain their exempt status.  “Small” New York City employers will surpass the increased federal minimum salary level of $913 on December 31, 2018, when the minimum salary level will increase to $1,012.50 per week for employees who are exempt under the administrative or the executive exemption. 

Also, most New York not-for-profit employers who are not covered by the Fair Labor Standards Act – and therefore do not have to pay their exempt employees $913 per week starting on December 1, 2016 – would be required to pay employees who are classified as exempt under the administrative or executive exemptions in accordance with the heightened New York State minimum salary requirements.  

The Department of Labor will receive public comments about its proposal to increase the minimum salary levels until December 3, 2016.   We will provide more information as it becomes available.